Usa the Housing Bubble

Has the US debt Crisis affected its International Leadership Image? The answer is in the affirmative!

The real questions are: Why? How much? What is the way out?

Leadership positions are sometimes assigned to you; sometimes it is thrust on you, but most of the time it has to be quietly assumed. If you wait for someone to hand it over to you, it may be too late! Even as a nation, USA occupied a position of dominance and Super Power on its own. This happened towards the end of II World War - militarily, politically and financially.

Militarily, US involvement tilted the outcome of the war in favour of the 'Allies' and brought an end to the combined challenges posed by Germany, Japan and Italy. USA used Nuclear Weapon to end the war. During cold war they armed themselves to the hilt against USSR and poured money in R&D / Technology and acquired 'Knowledge power'.

Politically, Allies carved out Israel from Arab territories and defined their sphere of influence. US virtually acted as the World Police say in Korea, Vietnam, Iraq, and Afghanistan. They took a leading role in penning the charter of United Nations.

Behind all this dominance was their financial might. They aided the reconstruction of Europe under Marshal Plan. At the Breton Woods Conference they ensured Economic dominance of US Dollar: it was pronounced as a medium of Exchange instead of Gold.

The US debt crises have taken the wind out of its sail. After the Housing bubble, the pumping of money in the US market to create jobs and refloat its economy caused a skewing of DEBT: GDP ratio which is now nearly touching 100%. Lack of a unified political solution brought US economy rating down from AAA to AA challenging its financial position. Now it has to cut Defence Expenses. The Financial power has tilted to Countries which created industry and jobs; predominantly in favour of China - partly shared by India, Brazil, & South Africa (BRICS). They kept their Books balanced.

Look, the Baton is slipping out of US hands!